Last year's Energy White Paper, together with supporting documents such as the Biomass Strategy, provided a framework for our energy policy to meet today's challenges: of tackling climate change by reducing carbon dioxide emissions and ensuring secure, clean and affordable energy as we become increasingly dependent on imported fuel. Earlier this month the Energy Bill was put before Parliament which puts in place the regulatory building blocks we need for a low carbon future. Measures in the Energy Bill, including nuclear power, a greater deployment of renewables, carbon capture and storage, and offshore gas infrastructure, will help build our energy security, reduce emissions and place the UK at the forefront in the development of low carbon energy technology.

The Energy White paper included an important chapter on heat and the distributed production of energy. In it the Government announced the project that led to this document and set out its plans for levelling the playing field for distributed generation. It also set out our existing heat related strategies: on combined heat and power, on microgeneration and on biomass.

Heating — mainly in the form of gas — accounts for just under half of UK's total final energy demand. Indeed, it may come as a surprise to many that the fuel and electricity used to produce heat is responsible for almost half of UK's carbon dioxide emissions: the energy we use to keep warm is itself an important cause of global warming.

In the Energy White paper, the Government undertook to "...conduct further work into the policy options available to reduce the carbon impact of heat and its use in order to determine a strategy for heat. The work will look at the full range of policy options, including the range of existing policy mechanisms such as the EU ETS."

This Call for Evidence is an important next step in developing this strategy. It sets out the results of analysis of the heat market undertaken by the Office of Climate Change (OCC), asks you to contribute to the Government’s understanding by providing relevant evidence and inquires whether and what further policies might be needed.

In March last year the heads of government at the European Council of the European Union made a commitment to achieving 20% of total energy from renewables by 2020. Last week the European Commission published its proposals to implement this decision. We already have strategies to encourage the uptake of renewable electricity and of biofuels in road transport, and the EU target will require us to go further in both these sectors. We also recognise that more needs to be done to bring on renewable heat. As the Prime Minister said in his speech to the WWF in November: "Meeting our target will also require greater use of renewables to heat our homes and buildings. So we will introduce new measures to bring forward renewable heat." The Government will issue a consultation later this year on policy options for the heat, transport and electricity sectors to increase the supply of renewable energy in the UK to meet the UK’s share of the EU target, with the intention of publishing a full UK Renewable Energy Strategy in 2009, once the EU proposals have been finalised.

This document sets out our understanding of the opportunities and prospects for renewable heat and some of the barriers that prevent the greater use of renewable heat. In particular we ask for your views about the technologies available to us: which of them offer the most efficient and practical contribution to achieving our aim, and in which specific scenarios? We would also like your views on whether we need new incentives to stimulate the development of renewable heat; what form they might take; and which options provide the most cost-effective solutions. Your responses will help us prepare the policy options for increasing renewable heat for the consultation on the UK Renewable Energy Strategy.

Decarbonising heat also means making more efficient use of conventional fuels. It is interesting that power stations discard almost the same amount of energy into the atmosphere and waters as householders use to keep warm. Certainly not all of this surplus heat can be used, because it is often in the wrong place, or at the wrong time, or at the wrong temperature. Nonetheless it is with this in mind that the Call for Evidence asks about the scale of surplus heat, especially from electricity production, and talks about ways in which it can be successfully exploited.

The Climate Change Bill and the development of five-year carbon budgets puts an even greater onus on the Government to be able to set and control emissions across the whole economy. To supplement last summer’s Call for Evidence on a supplier obligation by Defra, we are including further questions about how all heat emissions might be included in a carbon market.

Changing the way in which we think about and use heat will be difficult and must be achieved cost-effectively. To move the discussions forward we need technical contributions and firm evidence on how we can overcome barriers to promote renewable heat including biogas, what role should lowcarbon electricity play in heating and how surplus heat can be captured, transported and used, especially where we have a well established gas network.

Reducing the emissions from heat production is a cross-cutting challenge, and I am delighted that this document is being jointly issued by my own Department (BERR), Defra, and the Department of Communities and Local Government (CLG). Officials in all three departments have helped the OCC develop this work, and this collaboration will continue when we analyse and respond to the evidence you give.

We are determined to become a low carbon economy. The provision of affordable, low carbon heat from diverse and reliable sources is fundamental to our objectives on fuel poverty, climate change and energy security. This Call for Evidence is an important step in the process of decarbonising the heat needs of our homes and businesses.

Rt. Hon. John Hutton MP

January 2008